No Big Surprise: TV Watchers Fleeing Premium Channels For Streaming

With more and more options in premium television popping up, consumer subscription habits are evolving. So it comes as no surprise that subscription video-on-demand services are on the rise, while premium TV channel subscriptions have declined.

Premium TV subscriptions, such as HBO and Showtime, have declined by 6% over the past two years, while consumers flock to SVOD products such as Netflix and Hulu Plus, a survey by The NPD Group found.

However, premium TV still has the upper hand when it comes to consumers. In August 2013, U.S. households with premium TV subscriptions were down to 32%, while those with SVOD subscriptions rose to 27%.

“As SVOD services have gained momentum, it’s clear that some consumers are trimming their premium-TV subscriptions,” Russ Crupnick, senior vice president of industry analysis for The NPD Group said in a news release. “As SVOD increasingly strives to become a channel itself, viewers might consider it to be an adequate substitution for other premium channels, or perhaps they are switching to economize on their time and money spent.”

Plepler claimed password sharing could have a positive effect on HBO’s bottom-line, theorizing that students who share their parents’ account are more likely to subscribe to HBO later in life.

The future of SVOD services – namely Netflix – come under question recently with the end of net neutrality. A ruling by a federal appeals court last week gives Internet service providers the ability to charge premium rates, additional fees, or block access to any content provider the ISP wants.